The National Labor Relations Board suffered a minor blow to its effort to expand its joint employer standard when the U.S. Court of Appeals for the District of Columbia Circuit declined to enforce the Board’s decision in CNN Am., Inc. The D.C. Circuit found that the NLRB had not sufficiently explained its reason for deviating from the well-established “direct and immediate” control standard and instead applied a broader “share or codetermine” standard for determining when two separate entities are joint employers under the National Labor Relations Act.
The impetus of the CNN case was Cable News Network’s decision to change the manner in which it hired technicians, operators and engineers to perform technical work at both its Washington, D.C. and New York broadcasting stations. For years, CNN had contracted with a staffing agency for these technical workers. But in 2003, CNN began hiring them directly to better “take advantage of technological developments in the industry.” This change led to many of the previously contracted workers losing their jobs, prompting their union to respond by filing unfair labor practice charges against CNN. The union alleged, among other things, that CNN had been a joint employer with the staffing agency of the technical workers at all relevant times. The NLRB eventually found that CNN was a joint employer with the staffing agency because they shared or codetermined “those matters governing the essential terms and conditions of employment.”
In refusing to enforce the NLRB’s order late last week, the D.C. Circuit chastised the Board for brushing off, in a single footnote, its established precedent of using a “direct and immediate control” joint employer standard. The court stated that “an agency changing its course must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.” The matter was remanded back to the NLRB to give it an opportunity to articulate why it was changing the standard. In the process, the court contrasted this case from the NLRB’s decision in the by now, well-known Browning-Ferris opinion — where the NLRB extensively discussed its choice to move away from the “direct and immediate” standard.
Ultimately, the decision is a victory for employers in the joint employer fight. But, the issue is far from resolved, as the NLRB could still stand by its decision and simply articulate the reason for changing the standard. It should also be noted that the Browning-Ferris decision is on appeal and is awaiting review by a different panel before the D.C. Circuit. Best Best & Krieger will provide updates on the status of the Browning-Ferris appeal as they become available.
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